ORNGE air ambulance service now run by Ontario deputy minister

The dream of getting rich at ORNGE air ambulance ended Wednesday as high-paid executives got pink slips, a series of mysterious for-profit companies were shuttered and well-paid board members were given the boot.

The new president at the publicly funded agency is Ron McKerlie, a deputy minister in government services who regularly lectures on accountability. Health Minister Deb Matthews told the Star she put McKerlie there and made other changes because she was not pleased with ORNGE’s transparency in the weeks following a Star exposé.

“It became abundantly clear there were issues at ORNGE that required new leadership,” Matthews said.

An ongoing Star investigation has found that top executives at ORNGE, which gets $150 million in taxpayers money a year, had set up a warren of for-profit companies in what they described as an attempt to “leverage” the public assets of a service that was created to fly sick and injured Ontario residents to hospital. Meanwhile, the Star had learned that ORNGE was late to some emergency calls and failed to provide proper coverage in certain parts of the province. ORNGE will not answer questions by the Star about those calls. Ministry of Health investigators are probing them now.

McKerlie, in a speech to bureaucrats, once said that “without accountability you can’t transform and modernize government.”

Matthews said it is time for ORNGE to get back to focusing on the people of Ontario. All of those for-profit companies (the Star found at least a dozen) will be “wound down” over the next few months. One firm aimed to provide international medical coverage and emergency evacuation services to wealthy executives around the world. Three per cent of revenue was to be paid back to Ontario taxpayers.

At ORNGE headquarters this week, executives of the for-profit companies were called into boardrooms and told their services would no longer be needed.

The ORNGE office building — which includes expensive European-made couches, specially designed orange chairs and free gym memberships for executives — is home to the ORNGE communication centre, which dispatches helicopters and airplanes. As problems roiled around the “Crystal Palace” over the past six weeks, employees of the for-profit and non-profit arms of the service were told not to talk to each other. ORNGE brass had hoped the storm would pass.

Matthews grew increasingly frustrated over Christmas. “We need a new era of transparency and accountability at ORNGE,” she said, explaining her decision.

All salaries, she said, will now be disclosed. McKerlie is paid $335,000 in salary and taxable benefits as deputy minister.

Previously, the Star reported that most of ORNGE’s top officials were ignoring the provincial Sunshine List and initially the minister’s staff said the air ambulance service was doing nothing wrong. The Star then reported that founder and former president Chris Mazza earned $1.4 million a year and the minister responded by sending in a dozen forensic auditors to probe the books. The auditors are looking into a $6.7 million payment back to a Mazza-controlled for-profit company from the Italian company that sold ORNGE helicopters; payments to purchase a high-end speedboat; the payment of $600,000 to fund executive MBA courses for seven executives; millions of dollars that has passed through an ORNGE charity; executive perks and numerous other issues.

The province and ORNGE have also agreed that the ORNGE board of directors will be dissolved and replaced by volunteer board members. Sources have told the Star that some board members, who were also involved in the for-profit businesses, received as much as $100,000 a year and had shares in the for-profit companies. ORNGE will not discuss any issues related to personnel, including questions about executives hired.

ORNGE spokesman Gannon Loftus emailed the Star to say ORNGE would not answer questions the newspaper has unless they were “operational” and do not involve patients that were transported.

“We believe we have closed a chapter in the history of ORNGE. Our focus now is squarely on the work ahead: rebuilding the public’s trust while ensuring Ontario patients get the highest quality transport medicine services they have come to expect and deserve,” Loftus said.

A statement from the soon-to-be former chairman of ORNGE, Rainer Beltzner, told staff that his board “determined that it is in the best interests of the organization to resign as soon as a transition to a new volunteer board can be put in place. This will be done with input from the Government of Ontario.”

Progressive Conservative MPP Frank Klees, who raised concerns about the business structure at ORNGE last April, said the changes announced Wednesday are “a beginning but it’s not enough.”

It took too long for the government to act after being warned about troubles at the air ambulance service, added Klees, who repeated his calls for the appointment of a select committee of the Legislature to call witnesses into the goings-on at ORNGE.

“The public deserves to know what went on behind the walls of this company,” Klees said.

The moves made by Matthews and ORNGE on Wednesday are “sweeping this mess under the rug,” charged New Democrat MPP Jagmeet Singh (Bramalea-Gore-Malton).

“We can’t be wasting money,” Singh said at Queen’s Park, noting problems have been building at ORNGE for years.

After eHealth and the other scandals, the government “should be more pro-active with these types of things” to combat concerns there may yet be other government agencies where troubles will be uncovered.

“We need to come to the bottom of this,” Singh said, adding that he backed the Conservative call for a special Legislative committee to investigate and call witnesses so that taxpayers can learn the full details.

This week’s actions were not predicted by top ORNGE executives, who sent a briefing note to the Health Ministry one year ago over various issues. In it, ORNGE stated that the province of Ontario lacked the power to “take over or direct the management or control of ORNGE, or appoint/replace the members of its Board of Directors or its management team.”